Amazon Ruling: No Overtime for Those 25-Minute Security Lines

This week, the United States Supreme Court unanimously ruled in Integrity Staffing Solutions, Inc. v. Busk that employees working warehouse jobs at Amazon were not to be paid overtime for post-shift wait lines that sometimes reached 25 minute delays.

Two workers, who filed the class action, alleged they were forced to wait through excessive security check lines following their shifts. The workers contended they should have been compensated for their time spent during these lines. The Ninth Circuit Court of Appeals ruled in favor of the employees before The Supreme Court reversed. The Court reasoned the security screenings were not “integral” to their jobs as employees primarily hired to pack and ship products to Amazon customers; the employees were not hired to walk through security lines.

This logic is distinguished from previous Supreme Court rulings where certain pre/post-shift activities were deemed compensable.  These have included time battery-plant employees spent showering and changing clothes because the chemicals in the plant were “toxic to human beings” [1] and time meatpacker employees spent sharpening their knives because dull knives would “slow down production” on the assembly line, “affect the appearance of the meat as well as the quality of the hides,” “cause waste,” and lead to “accidents.”[2]

The decision is a major loss for wage and hour advocates who believe in principal that all workers should be paid for their time from the moment they are required to be at work. Although the decision was unanimous and now current law, this is not likely the end of pre/post-shift litigation. Employers such as Amazon, armed with this new Supreme Court decision, might be even more emboldened to reduce security screening staffing, reducing costs, and increasing worker lines.

[1] Steiner v. Mitchell, 350 U. S. 247 (1956)

[2] Mitchell v. King Packing Co., 350 U.S. 260 (1956)

Human Rights Commission Holds Free Wagetheft Workshop in Tacoma

The City of Tacoma Human Rights Commission is holding a Wagetheft Workshop for workers and victims of wagetheft tonight in Tacoma, WA. Wagetheft is a major issue both nationally and here in the Pacific Northwest. Last week’s closing of Paseo in Seattle set off a flurry of media attention and social media on the issue of exploited workers. The Human Rights Commission’s effort to educate the community on wagetheft and the remedies available through the Department of Labor & Industries and private attorneys should be applauded.

“Wagetheft” is an employer’s taking of time from the employee and not appropropriately compensating the worker for that time. Wagetheft violations can include unpaid overtime, denial of rest breaks and meal periods, improper tip sharing, misclassification etc. Wagetheft disproportionately affects low-wage workers who have rights under Washington State Law and the mirroring Federal Labor Standards Act. However, many low-wage workers have unclear immigration status, do not speak English, or are otherwise afraid to complain to their employers. Tacoma’s leading effort to address wagetheft in our community is essential to addressing the needs of working local residents.

For Questions or More Information about the Workshop, Contact:

William Yi, Tacoma Human Rights
wyi@cityoftacoma.org or (253) 591-5162

Non-compete Agreements Popping Up in Uncommon Industries

If you think non-competes are just for executives and scientists, you should add the guy who makes your sandwich at Jimmy John’s. The Huffington Post recently reported that Jimmy Johns is one of a number of low-wage-field companies requiring non-compete clauses with workers. The New York Times and The Seattle Times similarly reported on the increased use of non-compete clauses for such positions as hair stylists, event planners, and camp counselors.

Generally, non-compete agreements are specific provisions in the employee’s contract that restrict an employee from working for a competitor after his or her employment ends. Non-competes are usually limited in scope, duration, and geography (i.e. Doctor may not practice anesthesiology for 1-year within a 5 mile radius upon leaving employment).[1] The agreements can have a significant impact on an employee seeking part-time work during or full-time work after his employment ends.

In Washington, non-compete agreements must be “reasonable and lawful.”[2] Generally, two factors are used to determine whether a non-compete is reasonable: the geographic scope of the restraint and the time period for which an employee is restrained.[3] Washington Courts recognize the competing interests of an employee’s desire and right to work after leaving employment and an employer’s interest in protecting an established client base and investment in employee training.

However, the growing trend in low-wage workers being subject to non-competes has garnered increased criticism as examples of employers using unfair leverage over low-wage workers; low wage workers who routinely lack the bargaining power or benefit of a lawyer in drafting a more reasonable agreement.

For further reading, see San Diego Law Professor Orly Lobel’s book on the rise of non-competes in “Talent Wants to Be Free: Why We Should Learn to Love Leaks, Raids, and Free Riding.”

[1] See also Emerick v. Cardiac Study Ctr., Inc., P.S., 170 Wash. App. 248, 258, 286 P.3d 689, 694, as amended (Aug. 8, 2012), review denied sub nom. Emerick v. Cardiac Study Ctr., Inc., 175 Wash. 2d 1028, 291 P.3d 254 (2012) (Washington courts have not yet held that restrictive covenants between physicians are unenforceable).

[2] See Wood v. May, 73 Wn.2d 307, 313, 438 P.2d 587 (1968)

[3] See, e.g. Alexander & Alexander, Inc. v. Wohlman, 19 Wn. App. 670, 688, 578 P.2d 530 (1978) (100-mile restriction to apply only to customers of employer’s Seattle office);

Paseo, The Workers, and The Sandwich Caught In-Between

Yesterday, hungry customers of beloved Paseo Restaurant in Seattle were met with a simple sign on restaurant doors reading

“Due to unfortunate circumstances, we are closing our doors. We appreciate all the support and loyalty you have shown us over the years. We will miss you. Thank you, The Paseo Crew.”

Paseo’s two restaurants in Fremont and Ballard, serving its famous cuban sandwich, have received national acclaim for its cheap eats cuisine and is a favorite among Seattleites.

However, local media, including the Puget Sound Business Journal, The Seattle Times, and The Stranger have reported on the possible reasons for the closing, namely, a lawsuit filed by four Paseo workers for unpaid overtime, rest-break violations, and alleged racial discrimination on September 14, 2014 in King County Superior Court (No. 14-2-24553-0 SEA). The complaint mainly alleges that employees were paid straight time wages for hours worked over 40 hours and not paid the additional 50% premium amounting to time-and-a-half. Non-exempt employees working over 40 hours per week, generally must be paid time-and-a-half their hourly rate under RCW 49.46.130.

As an attorney who regularly represents employees failing to receive wages and denied rest breaks inconsistent with the Washington Minimum Wage Act, Industrial Welfare Act and Federal Labor Standards Act, the Paseo workers’ claims, if true, are not uncommon in the restaurant industry.[1]

Workers who allege unpaid wages or denied rest breaks may file a claim at the Department of Labor & Industries or hire a private attorney. The "Dept. of L&I" may issue penalties and pressure businesses with threats to their licenses while private attorneys may seek recovery of the wages through the court system. Attorneys generally work on a contingency fee basis or recover attorneys’ fees from the other side if successful. This allows for low-wage workers to seek the services of a private attorney without the expense of hiring a lawyer by the hour.

Seattle has stepped-up efforts to address wage theft concerns by proposing new minimum-wage investigators in the Mayor’s new budget. The City of Tacoma is also making efforts to address wage theft by holding a Wage Theft Workshop for employees on November 20, 2014. For more information about the seminar, visit the City of Tacoma Human Rights Commission.

[1] See As Bad You Think It is, It’s Worse: Wage Theft Comes to America by Les Leopold published in the HUFFINGTON POST on November 11, 2014.

Sorry Kid, No Overtime for Movie Projectionists

Last week, the #1 article from Sunday's edition of The New York Times was an Op-Ed piece highlighting the antiquated Federal Labor Laws that exclude millions of workers from receiving potential overtime.

Movie Projectionists are excluded from overtime under RCW 49.46.130“Sorry kid,” movie projectionists are excluded from overtime under RCW 49.46.130

Under Federal law, employees holding perceived white-collar positions like supervisor, manager, even vice president may be exempt from overtime requirements, even though their gross hourly rate is less than $12 an hour. Even in Washington State, a forum recognized for its strong labor laws, there contains noted exceptions for “administrative” and “executive” positions. As a result, an hourly manager at McDonald's may not be entitled to overtime and other protections under the Washington State Minimum Wage Act “MWA”. Parallel exclusions under the Federal Labor Standards Act (“FLSA”) include country elevator workers, newspaper delivery persons, sugar processing employees, and radio station employees. Yes, even movie projectionists are exempt from the 40-hour overtime requirements. These and other provisions of the WMA are ripe to be updated to reflect the dramatic changes to today’s workforce.

Simple Questions to Reduce Employer Wage Liability

There has been a widely reported increase in wage and hour litigation in Washington State and employers have cried foul at the cost of this litigation.[1] However, Washington employers should not be overwhelmed with the complexity of wage and hour laws as Washington has played a historic role in protecting hourly workers.[2]

When Washington employers take on the responsibility of an employee, they have an affirmative duty to understand the changing wage and hour laws and how they affect their policies and rights of their employees. Nevertheless, employers could greatly reduce their liability for wage litigation by regularly asking themselves these five simple questions:

  1. Are we paying employees the current minimum wage?
  2. Are we paying employees all of straight time earnings for hours worked under 40 hours in a fixed seven-day workweek?
  3. Are we paying employees one and one-half times the regular rate of pay for all hours worked over 40 hours in a fixed seven-day workweek?
  4. Are we giving employees a 10-minute break or intermittent breaks at the end of the third hour of work and are we giving employees a 30-minute unpaid meal period for working more than 5 hours? (Alternatively, are you compensating employees who work during these periods?)
  5. Are we paying employees at least once a month?

These simple questions do not attempt to capture the detail of exemptions, administrative codes, statutes, and case law. Nonetheless, as an attorney who regularly represents employees against employers for wage claims, these simple questions asked regularly would dramatically reduce employee-employer wage litigation.

[1] Washington-based Federal Justice Center reported 8,126 federal wage-and-hour lawsuits were filed between April 1, 2013, and March 31, 2014, See also More Workers Are Claiming Wage Theft, New York Times, Greenhouse, Steven published August 31, 2014 available here.

[2] See Parrish v. West Coast Hotel Co., 185 Wash. 581, 55 P.2d 1083 (1936), Washington Supreme Court upholding the constitutionality of a Washington minimum wage law for women and children. See Also Court in Larsen v. Rice, 100 Wash. 642, 171 P. 1037 (1918); Spokane Hotel Co. v. Younger, 113 Wash. 359, 194 P. 595 (1920). Parrish was affirmed by the United States Supreme Court in West Coast Hotel Co. v. Parrish, 300 U.S. 379, 57 S. Ct. 578 (1937), overruling Adkins v. Children’s Hospital, 261 U.S. 525, 43 S. Ct. 394 (1923), which struck down a similar District of Columbia law on substantive due process grounds.

Labor Report says Employers Steal More Than Bank Robbers

The Economic Policy Center (“EPI”) reports this week that more employers fail to provide full wages to employees.  When comparing 2008 U.S. Department of Labor statistics report of back wages to U.S. Census Bureau Data on bank robbery statistics, EPI reports wage theft amounts to triple the amounts stolen in bank robberies. The report is more anecdotal than statistically significant, however the broader report draws attention to the seriousness of wage theft. Read the entire report here.

New House Bill Aimed at Protecting Workers Against Wage Theft

Yesterday, advocates for labor groups testified before the Washington State Legislature offering a proposal to triple the amount of damages for employers violating wage and hour laws.

Dubbed “Wage Theft” by advocates, the denial of rest breaks, the withholding of pay, and unlawful deductions have increased legal attention for low-income workers.

Currently, the amount of damages a worker is owed may be double under federal law for the amount of the violation.  However, the new State bill HB2332 would increase damages to “plus twice” the amount of “wages unlawfully rebated…” under State law.

These bills and others throughout the United States mark a growing effort by labor groups to protect workers rights and fair wages.